Raising the federal minimum wage to $15 an hour — a proposal supported by President Joe Biden — would result in the loss of 1.4 million jobs, but would bring nearly 1 million people out of poverty over the next four years, a government study released Monday found.
The study, conducted by the nonpartisan Congressional Budget Office (CBO), also found that increasing the minimum wage would raise the cumulative budget deficit from 2021 to 2023 by $54 billion and would drive inflation, resulting in higher prices for goods and services.
The CBO evaluated a proposal that would gradually increase the minimum wage, reaching $15 an hour by 2025.
Once fully implemented, the CBO concluded “17 million workers whose wages would otherwise be below $15 per hour would be directly affected, and many of the 10 million workers whose wages would otherwise be slightly above that wage rate would also be affected.”
The report found, as a result of the minimum wage increase, 1.4 million workers would be without a job compared to scenarios where there was no change.
“And the number of people in poverty would be reduced by 0.9 million,” the report concluded.
Biden has called for raising the minimum wage, which has been set at $7.25 since 2009, to $15 an hour over the next four years. Last month, just days after being sworn in, he signed an executive order requiring that everyone working for the federal government be paid a minimum of $15 an hour.
The White House did not address the CBO report at a press briefing on Monday.
Raising the minimum wage for all workers to $15 an hour has been a rallying cry of the progressive wing of the Democratic Party. Biden included the proposal in his broad $1.9 trillion Covid relief package.
The proposal, however, faces opposition from Republicans.
Democrats are moving toward passing the coronavirus relief package using budget reconciliation, a process that would allow Congress to approve the proposal with only a simple majority, and therefore, no Republican support.
However, the rules of reconciliation may prevent the increased minimum wage from being included.
“I put it in, but I don’t think it’s going to survive,” Biden told CBS in an interview last week.
At a press briefing Monday, however, White House Press Secretary Jen Psaki said that Biden “remains firmly committed to raising the minimum wage to $15” but suggested the administration was waiting for input from the Senate parliamentarian on whether a minimum wage increase could be passed via reconciliation.
“We’ll see what the parliamentarian decides, and then we’ll see what additional options are,” she said.